Question

R and S share profits in the ratio of 3 : 2. They admitted 7 as partner for 1/4 share which will be borne by R and S equally. Find out the new profit sharing ratio.

Answer 1

1. Individual Sacrifice by R and S

The new partner's share of `1/4` is borne by R and S equally (1 : 1)

Sacrifice by R: `1/4 xx 1/2 = 1/8`

Sacrifice by S: `1/4 xx 1/2 = 1/8`

2. Calculation of New Shares

Formula: New Share = Old Share − Sacrifice

R's New Share: `3/5 - 1/8 = (24 - 5)/40 = 19/40`

S's New Share: `2/5 - 1/8 = (16 - 5)/40 = 11/40`

New Partner's Share: `1/4 = (1 xx 10)/(4 xx 10) = 10/40`

The New Profit Sharing Ratio among R, S, and the new partner is:

19 : 11 : 10